Fannie Mae’s national housing survey for September showed 37% of respondents expecting house prices to go up in the coming year – the highest level since the survey was launched in 2010. That number has more than doubled in the past year: just 18% believed the same thing in September 2011.
Few are expecting a bull market – the average expectation is for home prices to rise by 1.5% – but there increasing confidence that homes will retain their value or appreciate. Just 11% of people now think house prices will go down, compared to 25% a year ago.
One big part of the equation is mortgages: it looks like heavy messaging from the Fed about low interest rates stretching out to the horizon has made a dent in the public consciousness, with a notable move in expectations about mortgage rates.
That expectation of steady, or lowering, mortgage rates, combined with an increasing belief that prices will rise, feeds into an equally notable shift in overall views of the country’s economic direction. The majority still aren’t happy, but the gap is shrinking fast.
Big builders have been claiming there is a housing recovery underway, although many in the markets are not buying it. But numbers like this are making it increasingly hard to deny there is a recovery in sentiment, if not action.